Question

Bashies expecdds total sales of $699,000 for January and $353,000 for February. Assume that Bashies's sales are collected as follows: 50% in the month of the sale , 30% in the month after the sale, 19% two months after the sale, 1% never collected. November sales totaled $392,000 and December sales were $409,000. Prepare a schedule of cash receipts from customers for January and February. Round answers to nearest dollar. ( if a box is not used in the table leave the box empty; do not enter a zero).

Answer 1

Calculation of Cash Reciepts from customers for January and Februrary

Now we need to understand how we arrived at the above figures

1. 50% of the Sales are collected in the same month

January - $699,000 * 0.50 = $349,500

February - $353,000 * 0.50 = $176,500

2. 30% of Sales are collected in the next month

January - The 30% sales of December will be collected in January

$409,000 * 0.30 = $122,700

February - The 30% sales of January will be collected in February.

$699,000 * 0.30 = $209,700

3. 19% of Sales are collected two months after sale

January - The 19% sales of November will be collected in January

$392,000 * 0.19 = $74,480

February - The 19% sales of December will be collected in February.

$409,000 * 0.19 = $77,710

Cash Reciepts from Customer for

January - $349,500 + $122,700 + $74,480 = $546,680

February - $176,500 + $209,700 + $77,710 = $463,910